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What Would You Do?
What Would You Do?
Courtesy of Paul Price
Suppose you had the technical ability and raw materials to print up counterfeit dollars, euros or yen that were identical to the real things. Assume you could spend them as fast as you could create them with no fear of any repercussions.
Would you prudently print up only as much fresh currency as you needed for your current lifestyle? Would you create just a bit more than that to help relatives or those in need?
It is most likely you’d have your printing press running 24 hours a day, seven days a week. Becoming the richest person in the world would confer great power upon you.
You could rationalize this action because you plan to use the money for good purposes. Imagine the warm feeling you’d get by giving every person in America one million dollars, no strings attached.
Then think about what would occur almost immediately afterwards.
The “easy come-easy go” principle would take effect. Car dealer inventories would be cleaned out instantly. Wal-Mart, Target, Kohl’s, Nordstrom, even high-end Saks Fifth Avenue and Neiman Marcus would have nothing left to sell.
Smart manufacturers and merchants would withhold inventory because they knew the abundance of money, with no new extra supply of goods, would drive prices through the roof.
The people controlling today’s currency issuance are well aware of this. That is why newly minted funds from QE (quantitative easing, A.K.A legalized counterfeiting) programs never reach the general population.
Immediate distribution of wads of money to everybody would quickly destroy the financial system.
Doing it gradually, under the average person’s radar while keeping the benefits contained to a small group (politicians and bankers) allows favored individuals to add great wealth without immediately noticeable damage.
Before 2008’s crisis Central Banks did not believe they could get away with simply conjuring money out of thin air. The ‘bond vigilantes’ would have demanded higher and higher interest rates on government debt, busting budgets around the world.
First America’s Zero Interest Rate Policy (ZIRP) and later Europe’s Negative Interest Rate Policy (NIRP) took care of that major hurdle. Those policies destroyed the rate setting ability of the debt auction markets by injecting shill buyers (the Central Banks) to bid up bond prices on an unlimited basis.
The Bank of Japan (BOJ) started slower but has now surpassed both the US and Europe in terms of fiat-based money creation versus the size of GDP.
Do counterfeiters keep hordes of phony $100 bills in their home safes? No. They want to spend that fake cash ASAP, turning it into real assets whose value cannot be diluted away as the supply of money expands dramatically.
That is why global real estate, stock prices, corporate bonds, fine art and antiques have exploded to the upside. Even gold has been showing signs of life recently.
When fiat currencies finally collapse these hard assets can be converted back into whatever is serving as ‘cash’ in the new environment.
The BOJ recently bought over $5.6 billion of foreign denominated stocks in just one week. Every yen devaluation makes those stocks more expensive when reconverted back into local currency.
The one asset class that central banks don’t want to touch is sovereign debt. Central banks know many of these foreign bonds will end up "toxic" -- values slashed or in default. The central banks need to pawn off as much of the risk as possible to private entities and citizens rather than leaving themselves exposed when these bonds officially go bad. They will leave privately owned banks, insurance companies, individual investors, fixed income mutual funds and pension plans on the hook when the shit hits the fan, sometime in the future.
Unlimited money printing by the world's central banks will, by definition, devalue the currencies due to too much money chasing the same number of goods and services. Excessive money printing will ultimately make fiat-based currencies worth much less. This is already occurring right now in Venezuela and Argentina.
So stop worrying about whether stocks are going to crash. The real danger is holding major assets in ‘risk-free’ fiat-based money.
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NO question Obamacare is a massive illusion and Ilene is just a shill for her boss Phil who is just another control freak sociopath with his nose up Obama's ass !
Well let me see. I do hate the Fiat-Money System and I like to see it gone. So yes I would print as hell. Not for my life styple but to destroy the Fiat-Currency. The point of the other printers is. They do not want to end the system, they just want to get slowly more and more and to my disklike they are way too successfull with that.
I was amazed when I negotiated 9.8 pesos to the dollar on the street in Buenos Aires when the official exchange rate was 8.5:1.
I had to do this almost every day since I didn't want to get stuck with pesos.
I couldn't believe they were so desperate to get greenbacks.
You could get a grey goose martini for 4 bucks in a nice club.
Glad I took cash with me 7nstead of getting shafted at the atm.
We lived high on the hog for a week then returned home to crushing inflation.
I highly recommend it.
Has ZH had an influx of downvoting aliens or is it me? They thinking we can't see past?
The bigger question is how to a group of humans gain so much control over the rest of us by the use of phony bologna bullshit. The world's most powerful man works out with 10lb dumbbells.
The world's most powerful man rules over 5 billion dumbells.
Bonds >>> Bubble >>> Busted >>> Beheaded
The banksters need to repay us.
Bastille Day?
Agreed, those previous plays can come back and really bite. YET, those previous plays are also from the same people who created the scenario to have such plays.
IN this process, what must be done is to understand the process that has lead us all into this mess.
It is a good question you ask, yet it is not the right question.
I did not make these rules. YET those rules can be turned back onto those that did create such a mess.
Cheers,
Pens,
There is a world of difference between borrowing and printing.
These articles always seem to conflate the two. The debt is still there, which is why the dollar is relatively strong, and the Drachma will be a joke.
Tick Tock.
The article didn't say anything about borrowing, so I don't understand how it conflated borrowing with anything.
"The debt is still there"
Yeah ~ everybody OWES a debt to thugs who printed money out of thin air at zero risk and who threaten 'blood in the streets' if the ponzi ends. How the hell did I end up on this side of the ledger?
You must not know that "Even gold has been showing signs of life recently" - because no one has ever taken any interest in gold...
I know how I did ... I am The Bear, and someday I will strike
Except that we know you're a pussy cat at heart;)
You must read my posts
Lo and behold, Fed conjurers discovered that Wall St. peeps were happy to be complicit with the Fed, motivated to play the game as long as there was arbitrage that guaranteed huge bonuses...who'd uv thunk?
It is more complicated than:
Smart manufacturers and merchants would withhold inventory because they knew the abundance of money, with no new extra supply of goods, would drive prices through the roof.
It also has to do with inflexible and flexible supply and/or demand. Some items would swiftly rise in price, others not so much. And consider labor costs and behavior under the present conditions of alienation and debilitation. How many , with a million dollars, would choose to "retire", to switch to more satisfying pursuits and careers, instead of reporting to an unsatisfying job? What would happen to labor costs and "production" of what is currently "produced"?.
Currently,as was described in the article a select few are getting first dibs at newly minted fiat, and are using that access to increase their wealth and power. But also include the economic (political/social/environmental) distortions and dislocations of military spending or demand created by government spending on MIC and MIC finance.
The whole societal/economic system is a patchwork to limit access to resources and skew demand in order to maintain control by the current institutions and oligarchy.
You ain't paying for a 747 in gold...nor will your gold either fuel, maintain or run that thing.
Belief that your money is backed by gold might do that...far easier just to print tho.
I do agree "nominally speaking" the trillions on the balance sheet were "sterilized" (offset by the purchase of some asset somewhere else) but the reality is one of Ctrl P.
The value of the dollar immediately collapsed on the news of QE 1.
It is interesting in retrospect how everyone bought treasuries and mbs's. That says to me folks really were afraid of a dollar collapse...so they rushed to buy the collateral.
All those dollars got soaked up in HUGE reflation plays....not just real estate but gold, silver, oil, natural gas, land.
And one by one each of these pillars has been taken out.
Soon in my view the whole roof will cave in.
We've spent a trillion dollars fighting "the Taliban."
We wont spend even a million fighting Russia....
There is a difference between Money and Credit.
Money as defined by law. Section 31 U.S.C. 5103, defines legal tender as "United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues.
The Fed defines credit as such: "Credit dollars are a debt generated currency that is denominated by a unit of account. Unlike money, credit itself cannot act as a unit of account. However, many forms of credit can readily act as a medium of exchange. As such, various forms of credit are frequently referred to as money and are included in estimates of the money supply."
Do you think you would confuse a gold sovereign with a tally stick? They were both used to purchase the same basic things at the same basic price. Because they shared this functional commonality, does that make them the same thing? Money - Credit.
What about the official legal tender money supply which is a product of Law and Government, and credit (digital tally sticks), which can be created by anyone in contract. They are both used to purchase the same basic things at the same basic price. Because they shared this functional commonality, does that make them the same thing? Money - Credit.
As with that gold sovereign, you can hold a legal tender note free from any obligatory attachments, not so with credit, it only exist as a debt obligation. In fact, unlike tally sticks, you can't even hold credit, you are totally dependent upon the banking system to hold and manage its existence for you. And when I say existence I mean exactly that, the bank goes insolvent and your credit is gone!...POOF!
Read this carefully:
Congress has specified that a Federal Reserve Bank must hold collateral equal in value to the Federal Reserve notes that the Bank receives. This collateral is chiefly gold certificates and United States securities. This provides backing for the note issue. The idea was that if the Congress dissolved the Federal Reserve System, the United States would take over the notes (Fed liabilities). This would meet the requirements of Section 411 (Federal Reserve Act), but the government would also take over the assets, which would be of equal value. Federal Reserve notes represent a first lien on all the assets of the Federal Reserve Banks, and on the collateral specifically held against them.
Do you comprehend that? (I knew you would!)
Now, what does the government NOT get in that transaction?
It does not get the Trillions in credit created by the banks and Wall Street!
Why is that you may ask?
Because all that credit created by the banksters and Wall Street IS NOT PART OF THE MONEY SUPPLY!!!
It is because we conflate money with credit, we are living in a bankster's paradise (debt hell for us).
Do you think the banksters give a rat's ass worth of care that their exuberant over expansion of credit drives inflation up and the value of the legal tender down? NO! They just create more credit to compensate!
Do you still believe legal tender money and credit are the same thing?
There are $1.3-Trillion in U.S. Legal Tender in circulation around the globe, all the rest is Credit, an obligation to pay legal tender. And yes, that includes the $10-Trillion in bank debt that populates U.S. deposit accounts.
I understand that tally sticks worked pretty well.
The trillion dollar question. I give you 1 billion dollars in 1000 dollar bills to hold for me. Our contract says you will give me 1 billion dollars in 1000 dollar bills in ten years. Could you do it?
Ah. But the $1000 bill was discontinued in 1969 -- and is no longer in circulation. They are also worth more than their face value -- because there are (literally) [sourced from investopedia.com] only 165,372 $1000 bills still in existence.
Ha!
$1ooo bills stick out more than an honest plotician.
No I'd be stupid to take the cash to begin with. Instead, if you have $1 billion in $1000 bills then I turn you in to the authorities because you MUST be a drug dealer having large amounts of cash so I keep the reward and owe you nothing.
Wrong. He's already bought the authorities.
If you had a money printing press and instead "invested" let's say in $1 trillion of junk bonds and they all went bad...
1) would you go broke?
2) Would the debtors that defaulted actually have more money the day after they defaulted than they did the day before they defaulted?
3) If the previous holder of the junk bonds initially spent $1 trillion to buy the bonds and sold them to you for $1 trillion, does the previous owner now have more money than he did before he bought the bonds?
4) Did the new $1trillion cause more inflation (a rise in money supply) or did it simply reset everything to what it was the day after the bonds were issued? (when your printing press didn't really print money but instead was simply a computer that added digital funds to your bank account)
1. Yes, but you were broke to start in this scenario. No change. 2. No the trillion is just sitting in cayman islands. And everyone can pound sand. 3. No, but bad question. Lets look at the issuer. 4. Inflation already was created at the day of issuance. The trillion newly printed would add more inflation but you are saying it was immediately defaulted on so then no new inflation.
Think of a house being built on spec and go from there
But what do I know.
Right.
And in other news, three to six MILLION people will be penalized by the Amurikan government for not buying a service from a private corporation.
http://www.breitbart.com/big-government/2015/01/28/obamacare-tax-penalty-to-hit-millions/
This ladies & gentlemen is, the definition of crony-socialism.
Just wondering - What's the difference between forcing us to buy health insurance and States forcing us to buy car insurance? No one seems to complain about that.
Many states only require an assigned risk type policy. That covers the other guy in an accident.
Being forced into ØbamaTax does not protect the other guy.
why the downvotes? explain?
You are not REQUIRED to buy car insurance in New Hampshire.
you can always go without a car, there are in fact options available out there... you can even get a really crappy car that costs dick to insure or carpool, or get a vehicle that does not require insurance at all.
mandatory health insurance is a tax on being alive, paid to private companies that have corrupted the already corrupt government.
That's a Straw-Man argument, and isn't applicable.
Health Insurance and Car Insurance are very different things by their nature. The only similarity they have is they're both called "Insurance".
capltd, prime example of how far comment on this site has fallen, CD please come back, hell I would take chumba over economic idiots like this fool..
1) the optional nature of private vehicle ownership
2) a secondary consideration is the risk to others and their property
which may be posed by drivers without insurance or assets, and the (accurate?) perception that such zero-liability drivers would have even less-than average incentive to drive carefully.
It has been and is still the case that those posing a legally-recognized health risk to others or themselves (mental, communicable disease) may be arrested and confined.
Although DUI drivers may be locked up for violations, locking up "bad" drivers, and potentially "bad" drivers makes little sense, especially when many accidents have little or no connection to "bad" or certainly "egregiously bad" drivers.
That's like saying NFL players would hit even harder without helmets and padding.
The difference in law. As to car insurance. The States through its statutory framework takes for itself a property interest in your automobile through its titling system. This "joint ownership" is predicated upon the unrebutted presumption that driving your car on the publics right of ways is a privilege. It front runs the question that we the public have NO PROPERTY in the common use of our property. And as the titling system converts the "vehicle" into a ststutory designation of a motor vehicle, that property is now recognized by the courts as being used for the purpose of profit/gain/ or addvantage over the equal TRUST property rights of the traveling public. In other words, the State says in effect, "I will grant you the special privilege of USE upon CONDITION (waiver) that you turn yourself and your property over to whatever regulations I set forth. The State then creates a LICENSING statute. "NO PERSON" shall operate a "motor vehicle" without a license.
So they take extraordinary control over the property by legally redefining it. They then dictate how, when, and by whom the property will be used. Mandatory insurance, seat belt laws, CRMINAL AND ADMINISTRATIVE (non judicial) penalties including summary siezure and forfiture laws for violating the terms of the privilege.
As to Health insurance. YOU MUST be part of the Social Security system in order for this to apply. Obammy Care is just another entitlement just like SS, medicare, medicade, food stamps ect. BY YOUR VOLUNTARY APPLICATION, you waived constitutional / judicial protections of CONTRACT and PROPERTY in exchange for what the courts would classify as extraordinary protections paid for with money from the public treasury. The SS act rrequired state federal cooperation via the Compact Clause as it was judicially recognized that its elements (unemployment insurance/poor laws) were reserved to the States as police powers. But once the States sought federal permission to join the other states in the ACT, the States then were preempted for purposes of TAXATION and administrative control. (See the supremacy clause and federal preemption laws) Said another way, the feds do not possess State police powers. But as the CREATOR of the PRIVILEGE, Congress can TAX the privileges it creates. And it has. Look at your withholding. Your WAGE (property) is now the object of an indirect excise that uses that property AS A UNIT OF MEASUREMENT TO CLACULATE THE INDIRECT TAX. And now you are eligible BY DEFAULT to another entitlement that must be paid for through the power of taxation. APPLICATION TO A PRIVILEGE CONSTITUTING A WAIVER. The courts are now removed. You have no redress outside the political side of the equation.
150% Correct F em. Which is why the authorities always refer to 'driving' ie 'in commerce', legalese bullshit. You agree by registering the car to act as a citizen and so be at the behest of any and all legislation. You lose title ownership of it and get bummed all ends up, simple really.
Wonder why I don't need insurance for my pushbike? Give it 10 years.............twats
F em all but 6 : Obammy Care is just another entitlement.
Actually I believe Judge Roberts ruled it a tax.
Ergo ØbamaTax.
Gobblygok and the primary reason why lawyers write laws: so they are required to interpret and deploy them.
What the FUCK.
How much understanding does it require to understand F=mA, yet the world relies on it.
FUCKING Lawyer write books of worthless shit and then require their role in managing it and allow themselves to hide stuff for the benefit of owners. Just like Banksters
If you cannot write it in a paragraph, it is worthless and is designed for other purposes than what it proposes.
"If you cannot write it in a paragraph, it is worthless and is designed for other purposes than what it proposes."
Please see the 14th Amendment.
Your logic is flawed. When states require those that dont have a car to buy car insurance, come back and ask the question then.
State laws never required mandatory auto insurance until the insurance companies were allowed to write the laws. Does Warren Buffet really need more money?
I believe the banks were involved in part of that as well. You require MOAR coverage if their is a lien on the vehicle.
@ capltd,
You don't need and are not forced to buy car insurance unless you drive the vehicle on the governments roads.
Point being, you have the option to not participate and the IRS damned sure doesn't have a "special box" for you to check off whether or not you have car insurance and they monetarily don't penalize and/or "tax" you for NOT engaging in a private transaction.
They take the view that its your property, bought and paid for, tax included. I drive an old 85 pick up around my property, no tags, no car insurance and I defy the fucking IRS or Obama to do a damned thing about it.
Using your logic, government employees think your own body is not your property to use as you see fit and you need to engage in private commerce for your (and "societies) own good.
And the kicker is, they specifically targeted the young & healthy to tax/penalize, three to six million of them, so far.
Gubmint: ctrl-alt-del
.gov never penalise for not participating, haven't you noticed????????? SARC
Don't think the discussion has been about driving around your own rose beds nmewn unless i'm going mad?